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SFO to launch investigation into Young's dealings

The Serious Fraud Office is set to launch a formal investigation into the activities of Peter Young, the fallen Morgan Grenfell director whose fund management deals may have cost his company several hundred million pounds.

Sources said yesterday the investigation would begin next week, as soon as an inquiry by Morgan Grenfell into the same circumstances was completed and a report handed to the SFO.

At the centre of the SFO's inquiry will be the question of whether Mr Young, who was sacked by his employers on Tuesday, profited personally from the setting up of a series of holding companies in Luxembourg.

Morgan Grenfell has alleged that Mr Young, who managed two of the company's European investment trusts, evaded UK financial regulations by parking a wide range of unlisted securities in the Luxembourg holding companies.

After the irregularities were discovered, Morgan Grenfell's German owner, Deutsche Bank, was forced to spend pounds 180m to buy the unlisted securities from the trusts. It also faces heavy compensation claims from investors.

Meanwhile, Mr Young faced fresh embarrassment after lawyers acting on his behalf served injunctions on a number of national newspapers, including The Independent, forbidding them from publishing pictures of himself and a woman known only as Sandra.

The injunction also prevents newspapers from disclosing details of Mr Young's visits to Sandra, or another person named as Tracy, at their premises in the Paddington area of London between June and December last year.

The injunction is believed to have been aimed primarily at a tabloid newspaper which has been supplied with pictures and a story by Sandra and Tracy.

However, Peter & Peters, the law firm acting for Mr Young, failed to obtain an order stopping newspapers from reporting the injunction.

Mr Young and his wife, Harmanna, refused to comment on the court injunction yesterday. The couple, who have been repeatedly pictured together, remained silent at their home in Amersham, Buckinghamshire.

Mr and Mrs Young, who have been married since February 1991, have two sons, George, aged three years, and two-year-old Henry.

After his suspension from work, Mr Young, 38, has repeatedly spoken of his belief that even though he and his wife might lose everything he has worked for, at least they had each other.

Deutsche Bank has bought the Japanese banking subsidiary of Chase Manhattan Bank, which will be called Deutsche Morgan Grenfell Trust Bank.